Franco-German plan for European recovery will face compromises


Macron-Merkel plan to borrow on behalf of EU to help worst-hit countries is already being challenged by ‘frugal four’

When France and Germany announced a plan to raise €500bn (£448bn) on financial markets to fund a European coronavirus recovery plan, leaders sought to underscore the magnitude of the moment.

The French president, Emmanuel Macron, hailed “a real change of philosophy”, with the plan for the European commission to borrow money on behalf of the entire EU and issue grants to the most stricken industries and regions. Angela Merkel, the German chancellor, declared: “The nation state has no future standing alone,” and the German finance minister, Olaf Scholz, evoked the legacy of the US founding father Alexander Hamilton, who helped to transform the US into a true political unit with his scheme for the national government to take on debts accrued by individual states.

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